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Fixing the tourism industry

Source: The Myanmar Times Time:2018-08-10 15:52:26

The govt wants to lure tourists back to Myanmar. Will its efforts work?

The Myanmar tourism industry has suffered from a big drop in tourists due to the unfolding refugee crisis in northern Rakhine. With the number of visitors from the US and Europe declining sharply over the past year, some tour companies and hoteliers have already started putting their employees on unpaid leave arrangements to cut costs.

Meanwhile, the government is experimenting with a slew of incentives aimed at drawing visitors from Asia to Myanmar to counter the fall in western tourists. Last week, after backlash from the industry, it abandoned a prerequisite under new visa arrangements for Japanese, Chinese and South Korean visitors to have US$1,000 in cash when they enter Myanmar.

But the struggle in tourism is more deep-seated than just a fall in western tourists. The problem inherent in the industry is over-investment and unrealistically priced services. This will take more than short term government incentives to fix. A restructuring of the industry for the long term is required.

Taking measures

Myanmar received 1.72 million international visitors as at June 30.. That’s an increase of nearly 700,000 visitors since 2010, according to the Ministry of Hotel and Tourism

In the past year though, the number of tourists from the UK, France, Germany and Italy have fallen by an average of 15pc, U Kyaw Min Htin, chair of Myanmar Polestar Travels & Tours, told Myanmar Japon Plus magazine in June.

At a Nay Pyi Taw conference held last month to address the fall, stakeholders in the tourism industry urged the government for better policies and programs to promote Myanmar as a tourist destination. They also discussed ways to improve the industry, such as organising talent recruitment fairs and reducing confusion over visa requirements for tourists from China, South Korea and Japan.

This month, the Ministry of Labour, Immigration and Population announced that from October 1 onwards, holders of passports from China, Macau and Hong Kong would be eligible for US$50 visas on arrival at the Yangon, Mandalay and Nay Pyi Taw airports. Meanwhile, an earlier prerequisite for the visitors to each have $1,000 in cash was abandoned last week.

Visa exemptions will also be given to passport holders of Japan and South Korea from October 1, 2018 to September 30, 2019 at every international gateway into the country. As a result, the number of Japanese visiting Myanmar is expected to double over the period from just over 100,000 in 2017, according to U Ye Tun Oo, CEO of Vivo Myanmar Travel and Tours.

“As fewer European tourists are coming to Myanmar, we are trying to attract more visitors from Japan, South Korea and China. That is why we are giving visa exemptions to those countries,” said Vice president U Henry Van Thio at the conference.

Expensive sector

But fixing the industry will require more than just government stopgap measures to boost the tourist count. For growth that is sustainable over the long term, the industry must first develop more options in accommodation, domestic travel and activities for visitors.

In accommodation, for example, most reliable hotels in Yangon are pricy four and five star hotels. Between 2012 and 2017, backed by expectations of a tourism boom, foreign investors poured billions into building new hotels.

In Yangon, these included Melia Hotel by Vietnamese conglomerate Hoang Anh Gia Lai Group, Lotte Hotel by South Korea’s POSCO Daewoo and Pan Pacific Hotel Yangon, which was built by Shwe Taung Group in partnership with Singapore’s Keppel Land. Keppel also built a new wing at its Sedona Hotel near Myanmar Plaza.

To be sure, there have also been investments in budget guesthouses and hostels across Yangon. In the past year, a number of mid-tier hotels, such as Hotel G Yangon and Yama Hotel and Rooftop Bar have emerged.

But unlike Thailand, Malaysia and even Cambodia, there is still a lack of credible and affordable guesthouses or hostel options available for budget tourists, and that deters many travelers from visiting Myanmar.

U Kyaw Swa Min, managing director of Grand Lotus Travel and Tours, told The Myanmar Times the trouble with the Myanmar leisure tourism market started in 2012, when room prices were raised without controls.

After the country opened its doors to foreign investors in 2011, hoteliers raised their room prices by as much as 200pc to take advantage of the rising number of visitors and recover losses suffered during the 2007 Saffron Revolution and Cyclone Nargis in 2008.

“As a result, our country developed a reputation for being an expensive destination compared to other countries in the region. Because of this the number of leisure travelers to Myanmar did not rise by as much as anticipated,” U Kyaw Swa Min said.

Infrastructure investments

The country’s infrastructure also needs to improve. On her to-do list to improve tourism, which was revealed at the central committee meeting for National Tourism Development at Nay Pyi Taw, State Counselor Daw Aung Sn Suu Kyi listed the upgrade and expansion of existing railways and waterways in the country as her top two priorities for the industry.

“We could attract more tourists if our transportation system is modernised and made more convenient, Daw Aung San Suu Kyi said in her opening address.

By improving the land transport system, tourists will not only have more options to travel, they’ll also have more opportunities to enjoy the local sights and sounds. “That is why roads, water ways and railways should be taken as part of tourism aside from air travel,” Daw Aung San Suu Kyi said.

The State Counselor also recommended promoting community-based tourism, as this would enable tourists to learn more about the country’s culture and traditions as well as boost the livelihood of the people in the countryside.

Currently, there are about 13-community-based tourism destinations in the different regions and states which are being promoted by the government in cooperation with local tour companies as well as local and international non-government groups.

She also urged local hotels and restaurants to observe cleanliness and proper hygiene, as this will draw more tourists who will appreciate “livable hotels or guesthouses which are clean and cheap. Also we need to regulate the street food, just like in Bangkok,” she said.

Myanmar may be taking measures to draw more tourists to the country. In fact, there has been a 7pc increase in foreign tourists now compared to 2016, with visitors from Asia and ASEAN up by as much as 20pc, according to U Kyaw Min Htin.

But it will take time and commitment to keep them coming and ensure long term growth and sustainability in the Myanmar tourism industry.